For a better finish, start with Hyde.

Over the years, various management theories have been presented. Some of which could be argued to be management fads, however some have showed its distinguishing impact in the world of manufacturing industry. Total Quality Management (TQM) and Lean Manufacturing also known as Lean Production are two management approaches to optimization. To explain in simple way, Lean Manufacturing is the production of goods using less of everything, which could be manufacturing space, environmental tools, manpower, waste and engineering to develop new product. Hyde Manufacturing, a Massachusetts tool maker, also implemented lean systems, which reflected in miraculous improvement in the production process of Hyde.

For more than 130 years, Hyde Tools has been crafting small hand tools used in surface preparation, masonry, dry wall, flooring wall covering, in the automotive industry, as well as blade tools used in food processing, rubber and tire converting, and the abrasives industries. 275 people are working on 220,000 sq. ft. plan and carrying out versatile manufacturing processed which ranges from making blanks, heat treating, grinding, polishing, assembly, and shipping

Dedicated leadership and commitment of employees are key factor for the success of any Organization. Hyde has the work force, which continuously strive for betterment.  That is the reason why they have been successful.  Hyde has success key in form of 5S: Shine, Sort, Set in order, standardize and sustain. The workplace runs smoothly, safely and with less waste. With the purpose to reduce unnecessary transport of product and people, Hyde configured Work Cells. Customer demands were taken care by pull system. Implementation of visual signals has helped everyone to see what’s going on and what needs attention. Lean also helped Hyde to streamline processes associated with warehouse practices and eliminated waste. All these factors added to their greatly improved workflow and efficiency.  Lean initiative also reduced hazardous waste generation by 93 percent and solid waste generation by 85 percent

Hyde manufacturing has not just only revitalized their Lean initiative, but they have set an ideal tried and tested example for other manufacturers.

Founder Isaac Hyde’s standard still applies today: to make the best possible product from the most appropriate steel and try every day to improve on yesterday's best. America is benefited with Hyde’s efforts and provision of the edge it needs. And Lean has proven to best tool for Hyde to achieve that. Hyde has put their slogan into actions, “For a better finish, start with Hyde.”

References: 

1. http://www.idosi.org/wasj/wasj12%289%29/34.pdf
2. http://www.epa.gov/lean/environment/
3. http://www.massmac.org/newsline/0306/article05.htm
4. http://www.businessknowledgesource.com/manufacturing/comparing_lean_manufacturing_to_tqm_025551.html 

Lean Manufacturing and Worker Safety

The articles this week discussed the many advantages of lean manufacturing: eliminating waste, increasing resource productivity, and essentially improving the bottom line. The Seattle’s Children Hospital’s processes and systems were continuously developed and the hospital improved not only financially, but also in regards to patient care [1]. In addition with the help of streamlined processes, one branch of Starbucks was able to reduce its order completeness time from 25 seconds to 23 seconds [2].  Despite these benefits, in each instance certain staff or personnel were tentative about the implementation of lean manufacturing initiatives. Some were wary of a continuous process improvement system in a hospital, believing that the health process cannot be standardized and that productivity should not trump quality care in a health setting. Furthermore, some criticized Starbucks for trying to turn baristas into robots, implementing automated processes that reduced specialized, individual interactions with the customer. 

These concerns – of over-standardization and prioritizing productivity over quality – made me wonder about lean manufacturing’s impact on employees and their work experience. Are workers more satisfied with standardized processes? Does automating processes and reducing wasteful action reduce employee strain or injury? Or maybe lean improvement increases injury by forcing employees to engage in unusual or unnatural work processes? Potentially, lean manufacturing has no impact on worker safety at all. I set out to find more information.

A review of E-ONE Inc., an industrial vehicle manufacturing company, demonstrates that lean initiatives can not only improve processes but can also enhance safety measures. The company was able to reduce operators’ walking distances by almost 60 miles per year, and simultaneously eliminated 91 percent of unsafe conditions caused by congested work areas [3]. Standardized work procedures also reinforced the use of proper protective equipment which in turn reduced eye, back, leg, and finger injuries by at least 75 percent [3]. It would be difficult to separate these concurrent results as it appears that the reduction in incidents and accidents are related to the implementation of lean manufacturing initiatives. 

The article goes on to stress that in lean manufacturing, identifying and incorporating safety measures during every step of the process can lead to positive safety outcomes in addition to beneficial process outcomes. Similar to the way Starbucks executives identified unnecessary motion as waste, E-ONE classified safety hazards as “waste” and moved to incorporate the elimination of this waste in their lean manufacturing initiatives. 

Another article stressed the seven typical wastes of lean manufacturing: overproduction, unnecessary movement, inventory, waiting periods, transportation, product defects, underutilized labor, and superfluous processing [4]. The central point is that human downtime caused by safety failures is just as much of a waste. Standard safety processes and consideration of safety at all stages of process improvement significantly increase efficiency and reduce wastes that result from injury, accident, and lost labor time. 

When one hears “waste” in the manufacturing setting, they think of disorganized inventory, delayed supply, inefficient logistic processes, and redundant tasks or actions. But other extensions of waste exist in manufacturing. And whichever framework executives use in implementing lean manufacturing, it is vital to consider all forms of waste – including worker safety and accident reduction – in the process redesign. 

1. How does the classification of "waste" vary from industry to industry? Consider the healthcare industry with the example of the Seattle Children’s Hospital. Did other forms of waste exist aside from medical tool supply inefficiencies?
2. Lean manufacturing can also be tied to reducing pollution and focusing on environmental sustainability. Examples can be found in Boeing’s lean manufacturing initiatives which caused a significant reduction of its ecological and environment “footprint” as it was able to reduce raw material waste and scrap, lower energy costs from product rework, and use fewer harsh lubricants and sealants [5]. How can the idea of ecological, environmental, and energy waste be applied to other cases studied previously in the course? For instance, how has lean manufacturing transformed Herman Miller?

References:

[1] “Factory Efficiency Comes to the Hospital.” The New York Times, July 9, 2010.

[2] “Latest Starbucks Buzzword: “Lean” Japanese Techniques.” Wall Street Journal, August 4, 2009.

[3] English, Paul. “Jump Starting a Safety Program with Lean Manufacturing.” EHS Today, January 5, 2012. http://ehstoday.com/safety/jump-start-program-lean-mfg-0112.

[4] Kincaid, William. “Lean Manufacturing: Unexpected Benefits for Accident Prevention.” EHS Today, June 7, 2004. http://ehstoday.com/safety/ehs_imp_37039.

[5] Ross & Associates Environmental Consulting. “Pursuing Perfection: Case Studies Examining Lean Manufacturing Strategies, Pollution Prevention, and Environmental Regulatory Management Implications.” August 20, 2000. http://www.epa.gov/lean/environment/pdf/perfection.pdf.

Lean Government

Lean thinking or lean manufacturing has been one of the different process improvements adopted by companies worldwide. This methodology was derived from the Japanese manufacturing companies but it has gained momentum and has been adopted by various types of industries. Healthcare is one of the industries that has gained many advantages after applying this type of business practice in their processes. One example is Seattle’s Children Hospital, which about 4 years ago had a complete chaos in its supply system (1). Thanks to adopting a program called “continuous performance improvements”, C.P.I., which focuses on examining every patient’s characteristic and reducing or eliminating any activity that doesn’t produce value to the patient they have successfully increased their efficiency. This increase in efficiency has been reflected in cost reduction, patient addition and therefore profit boost.

Now it’s the turn for the government to benefit from applying these practices. Washington Governor, Jay Inslee, recently chose two CEO’s to run the departments of Social and Health Services and Employment Security (2). Why has this governor placed his confidence in two people that don’t have any experience in politics?

One of the CEO’s, Dale Peinecke, has been working for an aerospace supplier for the last 16 years. He said in an interview that the key reason they had chosen him was to bring in lean manufacturing techniques into government (2).

Lean government is a technique that allows identifying the most efficient way to provide government services. Government agencies have a lot of administrative and operational processes which can benefit from identifying the features that create value and translate them into uninterrupted movement and therefore efficiency. To make this uninterrupted flow of the processes it’s necessary to identify the activities that don’t add value to the citizens and consequently get rid of them. One perfect example of an unnecessary task in government is the redundancy of approval cycles in budget related processes. Although it is necessary to implement adequate controls to have a good accountability and traceability of government funds, it is also important to optimize and reduce additional steps in some of these processes. Other techniques that are applied in lean government are visual aids and controls that provide fast information, improving decision making.

The U.S. Environmental Protection Agency has promoted the use of lean techniques in government agencies which help to increase the transparency and improve performance in an express time frame (3). The Agency has divided the implementation of government lean technique into three stages: Event Planning, Event Implementation and Event Follow-Up. The Event Planning guarantees that the lean government process is well scoped and planned. The Event Implementation ensures that a correct team is in charge of delivering the changes in processes and guiding the people on the new approach. Finally, the last stage supports and perfects the process.

It sounds as a rigorous and thoughtful approach to introduce lean manufacturing techniques to government agencies, but in reality government agencies are subject to political influences which may not be subject to optimization through the application of stylized techniques.

Do you think this the correct way to run government agencies and political entities? Is society another component of a supply chain?

References

1. U.S. Environmental Protection Agency. Lean in Government. Iowa Department of Management. [Online] May 2009. [Cited: February 4, 2013.] http://lean.iowa.gov/files/Lean%20Govt%20Starter%20Kit-V2%207-09.pdf.

2. Wilhelm, Steve. Gov.-elect Inslee appoints two from manufacturing to top posts. Business Journal. [Online] January 10, 2013. [Cited: February 4, 2013.] http://www.bizjournals.com/seattle/news/2013/01/10/gov-elect-inslee-appoints-two-from.html?page=all.

3. Weed, Julie. Factory Efficiency Comes to the Hospital. The New York Times. [Online] July 9, 2010.

Vendor Consolidation: A Solution to Reduce Soft Cost

After reading the article Rethinking Procurement in the Era of Globalization, I Realised that it is really important for a company to quantify the risk of transaction during procurement. To measure the risk, we need to pay attention on two kinds of cost: hard cost and soft cost. The former is relatively easy to measure because most of the hard costs are direct costs that we can put a price tag on. While the latter is always intangible which makes it difficult to predict and measure.

But as mentioned in the article, in a globalized market, the role of soft cost has become more and more important when making a procurement decision – Even when the hard cost is really low, sometimes the company still won’t go for it if the soft cost were high. Now you might want to ask the same question as I did: then how to reduce the soft cost?

One of the most popular solutions is Vendor Consolidation. Below is a video by Ian Johnson giving an overview of how vendor consolidation will affect transaction costs?

Simply speaking, vendor consolidation is to choose the best suppliers that you trust, and minimize the number of vendors. By dealing with fewer vendors, the billing process will be clearer, the payment period is more likely to be reduced, and orders will be easier to manage and track. (Johnson, 2010) What is more, since the partnership will last for a longer time, the possibility of misunderstanding during the transaction will become tiny. Thus we do not need to worry about cultural differences and labor issues any more. To sum up, the overall risk of the transaction will be largely reduced.

Besides soft cost, vendor consolidation also helps to cut down the hard cost. In the video, Ian mentioned five benefits of vendor consolidation.

First of all, it will increase the company’s purchasing power, which will help to lower the purchasing price. Second, it will lower the freight cost since all of the goods are shipped from the same supplier. Third, the quality of the product or service will be largely improved because the deal is now based on trust and cooperation instead of simply a buy-sale relationship. Fourth, the company will gain a stronger contract agreement, which is, as the vendor is willing to hold parts for a longer time, the level of obsolescent and damage will decrease, and pilferage is also less likely to happen. All these four benefits lead to the fifth one – improve vendor acquisition, which help the company to better evaluate and choose new vendors. As shown in the graph above, this will reflect back to the first four benefits and thus create a virtuous cycle.

For now, we have seen so many benefits from vendor consolidation. But does it mean that it is always the perfect solution? For me the answer is no. Stick with one or two vendors will decrease the resilience of the supply chain. For example if Apple only buys its flash memory from one Japanese vendor, then at the time when tsunami struck Japan, its entire supply chain will shut down. Besides, without looking for new suppliers, the company will stay away from learning new ideas from different suppliers, and thus lose the opportunity of innovation.

Above is what I learnt about vendor consolidation. Please share with me if you have any new ideas.

JohnsonIan. (Oct 2010). How Business Soft Cost Reductions Leads to Hard Cost Reductions. Accessed: 5 Feb, 2013, From: DriveYourSuccess: http://www.driveyoursuccess.com/2010/10/how-business-soft-cost-reductions-leads-to-hard-cost-reductions.html